The Forex market is the largest global market with a turnover that is several times higher than the turnover of all other financial and commodity markets altogether. Why does it have such high attractiveness? Let’s define the most valuable advantages.
The Forex market offers very low starting capital requirements for participants. Most brokers allow you to open accounts with a capital of from $10. Neither on the stock market, nor on the commodity market, nor on any other exchange market, work with such small amounts is possible. Of course, from a small capital, the profit will be poor as well. But for a beginner, and even not a professional trader, this is an excellent opportunity with little risk to gain the experience and knowledge necessary to storm more serious market heights.
Even a relatively small deposit allows you to receive some profit on Forex. It happens due to leverage, allowing a trader to operate with amounts that many times exceed the size of his deposit. And although brokers in the stock and trading markets also often provide leverage to their clients – the size and conditions for obtaining leverage on Forex are incomparable with those in other markets. That is, the leverages 1:50 and 1: 100 allow the trader to operate with capital, respectively, 50 times and 100 times greater than his own. At the same time, in the stock or any other financial market, not even every client can get even smaller leverage.
Another significant advantage of the Forex market is its highest liquidity. The consequence of this unique quality is the opportunity for the trader to enter and exit the market at any time. Besides, high liquidity together with trading tools allows market participants to carry out transactions almost instantly.
In contrast to commodity markets and stock exchanges, where operations are carried out only during the working session, which usually coincides with the working day in the country concerned, the foreign exchange market operates 24 hours a day, 5 days a week. Market participants do not have to wait for the opening of a trading session. Also, there are practically no intermittent price changes (gaps), which often occur on the stock exchanges due to the fact that important information comes out of the ranges of the trading session. Therefore, a trader can plan his trading activity with great flexibility.
Spread is the difference between the purchase and sale of assets. It is minimal on Forex and allows a trader to reduce the total value of each transaction. Moreover, the trader, as usual, doesn’t pay commissions, and a broker gets profit exactly from the Ask-Bid spread.
Large portfolio of trading instruments
There is a fairly wide range of investment instruments available on Forex. You can trade major currency pairs, cross rates or exotic combinations of currencies. This approach gives a trader unlimited possibilities in selecting a trading strategy and methods for market forecasting.
High trading dynamics
Forex is characterised by a high intensity of change in the trading situation. Here, both intraday trading and scalping are successfully practised – short-term trading, in which many deals are concluded within a short trading period. It is important to note that all transactions take place in real time and reflect the current market situation at the moment.
Information about trading on Forex is distributed freely and in large quantities. Almost all Forex brokers suggest many valuable resources for the Forex education and all these resources are free. For example, Forex broker JustForex has even a whole analytical section, where everyone can find useful tips and signs when to open a transaction. Demo accounts allow you to work out your trading skills in a “live” market, without any investment on your part.
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